The nation’s top intelligence officer on Thursday said across-the-board budget cuts will likely continue for at least another year and are already forcing his agencies to take risks in doing without certain security-enhancing tools.

James Clapper, director of the Office of National Intelligence, spoke of “the three S’s -- sequestration, Snowden and Syria” -- to an audience of several hundred at a daylong conference of the Intelligence and National Security Alliance, a policy research group of retired officials and contractors.

In a talk heavily flavored by the ongoing impact of the leaks by former contractor Edward Snowden exposing the National Security Agency’s domestic surveillance activities, Clapper said today’s “diverse challenges present the worst array of threats I’ve seen in my 50 years.” He cited al Qaeda terrorism, the Boston Marathon bombing, sequestration, the Middle East, Syria and Snowden. “But we will respond to all of them and focus like a laser, despite all the distractions,” Clapper said.

Many people wrongly assume the 16 agencies that make up the intelligence community “were exempted from the sequester,” Clapper said. “And it’s not like longer lines at the airport or shorter hours at National Parks.” With cuts to intelligence agency analysts and capacity, “you can’t see or feel it for a long time -- it’s insidious,” he said. “Whatever you think of intelligence, you will have a lot less of it to complain about.”

He said his team is “trying to make smart choices to protect investments” rather than “apply the salami-slice approach.” One tenet is to “protect our most valuable asset—our people,” he said. But “we can’t sugarcoat it, in some areas we’re taking higher risks by being in the mode of ‘you can’t do that’ due to budget cuts.” In areas such as cutting money for acquisition programs, it might work for one year but it is not “sustainable,” he said.

Slamming Snowden as “not a whistleblower but a leaker,” Clapper said: “If there is a good side to this story, it’s that we’re having some conversations that needed to happen. We were already focused for the long-term on insider threat detection, but probably not with the intensity we have now.”

Describing the intel community’s long-term adoption of a single information technology enterprise, Clapper said the innovation -- originally savings-driven but now focused on enhancing security -- might have detected Snowden earlier if it had been fully operational. “What we spend on IT is amazing,” he added, noting sarcastically that his community’s budgets and congressional justifications since the Snowden revelations are now familiar to all.

But the system has its problems, he hinted. “We’re well past the euphoria of what a great idea this is and are now in the passive-resistance phase,” he said.

Another response to the Snowden affair, Clapper said, is the community’s need to accelerate security clearance refreshers for veteran employees. And the release this week of 1,800 pages of the Federal Intelligence Surveillance Court’s opinions on NSA domestic activities “refutes the allegation that the court is a rubber stamp for the NSA,” he added. He said he expects Congress to make some changes in surveillance law.

Transparency, Clapper said, is important to “restoring the confidence of the American people in intelligence and in their leaders. But our adversaries go to school on it, too.” He called the NSA “an honorable institution with a phenomenal workforce dedicated to conducting their mission lawfully.” They are “appalled by Snowden,” he said. The ex-contractor has made their “crucial work more difficult.”

Recent weeks for Clapper have been “all Syria, all the time,” he said. He cited with pride the community’s recent report on the Aug. 21 deployment of lethal chemical weapons against hundreds of Syrian civilians, saying it reflected “improved tradecraft, analytic integrity and the red-teaming” increasingly used since the 2002 national intelligence estimate on weapons of mass destruction in Iraq turned out to be off-base. “It’s a case of melding a collection of disciplines, with a heavy use of open sources,” he said.

Clapper spoke emotionally of the anniversary of the Sept. 11, 2001, terrorist attacks by “a dangerous and agile adversary.”

“We have reinvented ourselves and reconstituted the areas cut in the 1990s, repealing the peace dividend” the country enjoyed after the collapse of the Soviet Union, he said. Intelligence spending then was cut 22 percent. “We weren’t as connected as a community,” he said. But even today “integration of the intel community is a journey, not an end.”

In response to a moderator’s question, he said all in all the country is safer today and that the “huge investment” after 9/11 has paid off.

Like the Pearl Harbor attack of Dec. 7, 1941, Clapper said, people will remember 9/11 but they “won’t dwell on it like they used to. The most important factor to contemplate on 9/12 is the focus on the centrality of mission.”

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